ECONOMICS (856)
Aims:
1. To enable candidates to acquire knowledge
(information) and develop an understanding of
facts, terms, concepts, conventions, trends,
principles, generalisations, assumptions,
hypotheses, problems, processes, etc. in
Economics.
2. To acquaint candidates with tools of economic
analysis.
3. To develop an understanding of important
economic problems.
CLASS XI
There will be two papers in the subject.
Paper I - Theory: 3 hours ……80 marks
Paper II- Project Work ……20 marks
PAPER - I (THEORY) – 80 Marks
Part 1 (20 marks) will consist of compulsory short
answer questions testing knowledge, application and
skills relating to elementary / fundamental aspects of
the entire syllabus.
Part II (60 marks) will consist of eight questions out
of which candidates will be required to answer five
questions, each carrying 12 marks.
Note: The syllabus is intended to reflect a study of the
theory of Economics with specific reference to the
Indian Economy. Therefore, examples and specific
references to the Indian Economy must be made
wherever relevant.
1. Understanding Economics
(i) Definition of Economics: Adam Smith, Alfred
Marshall, Lionel Robbins, Samuelson.
Basic understanding of economics and
economic phenomena to be explained
especially in the context of the concept of
scarcity and allocation of resources. Students
may be introduced to the main points on
which the various definitions of economics
could be analyzed. Features of definitions and
two- three criticisms.
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4. To acquaint candidates with the main
institutions through which the productive
process is carried out.
5. To develop an understanding of the role of
institutions in the functioning of an economy.
6. To enable candidates to compare their own
economic structure with that of the other areas
of the world.
(ii) Micro and Macro Economics – Meaning and
Difference. Basic concepts: utility, price,
value, wealth, welfare, money, market,
capital, investment, income, production,
consumption, saving, Business cycle,
Aggregate demand and Aggregate supply.
Meaning and difference between Micro
and Macro Economics. A conceptual
understanding of the terms: utility – types and
features, total utility, marginal utility and
diminishing marginal utility; price –
definition and general rise and fall in price;
Inflation: meaning, demand pull and cost
push (diagrams not required); value – real vs
nominal value; wealth – explanation of the
term, classification (personal and social);
welfare – economic welfare, social welfare
and relation between wealth and welfare;
money – barter economy vs money economy;
market – meaning and size; capital –
meaning; investment – meaning, investment
as a process of capital formation; income –
meaning, factor incomes; production –
meaning; consumption – meaning; saving –
meaning; individual saving and aggregate
savings.
The above terms to be explained with the help
of relevant examples.
 (iii) Basic problems of an economy: what to
produce; how to produce; for whom to
produce; efficient use of resources.
The basic problem of scarcity and choice must
be emphasized. As this problem is universal in
character, i.e. faced by all economies,
irrespective of the economic system they
follow, it must be explained using the concept
of Production Possibility Curve. The three
problems - what to produce, how to produce
and for whom to produce - must be
highlighted. The role of technology and a shift
in the Production Possibility Curve must be
explained.
(iv) Types of economies: developed and
developing; Economic systems: capitalism,
socialism and mixed economy; mechanism
used to solve the basic problems faced by each
economy.
Characteristics of developed and developing
economies; Development experience of India:
a comparison with neighbouring country
(China) in terms of growth, population and
sectoral development (introducing regional
and global economic grouping such as SAARC,
European Union, ASEAN, G-8, G-20 - basic
knowledge); different types of economic
systems; definition, features, merits and
demerits of capitalism, socialism and mixed
economic system; mechanisms used to solve
the basic problems under each economic
system to be explained with the help of
examples. The role of government along with
the price mechanism to be emphasized.
2. Indian Economic Development
(i) Introduction.
A brief introduction of the state of the Indian
Economy on the eve of independence. Main
features, problems and policies of agriculture,
industry and foreign trade.
(ii) Parameters of Development.
Parameters of development: per capita income
and human development index.
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(iii) Planning and economic development in India.
An overview of Macro objectives (sectoral
objectives not required) and major thrusts of the
different five year plans in India.
(iv) Structural Changes in the Indian Economy after
liberalization.
Need, meaning, significance and features of
liberalization, globalization and privatization of
Indian Economy; disinvestment: meaning.
(v) Current challenges facing Indian Economy.
Poverty – absolute and relative, main
programmes for poverty alleviation: A critical
assessment of PAPs (Poverty Alleviation
Programmes); Rural development. Credit and
marketing: role of cooperatives, agricultural
diversification; alternate farming /organic
farming: meaning and importance.
Human Capital formation: How people become
resource; role of human capital in economic
development; Growth of education sector in
India; Employment – formal and informal
(Meaning only); Unemployment- types of
unemployment, causes for unemployment,
Policy measures.
(vi) Economic growth and development.
Economic Growth and Development – Meaning
and difference. Comparative study of Indian and
Chinese economies on the following indicators:
(a) Unemployment (b) GDP growth (c) GDP
per capita and GDP PPP (d) direct foreign
investment (e) inflation (f) poverty.
(vii) Sustainable Development.
Effect of Economic Development on Resources
and Environment.
Understanding the concept of Sustainable
development; Need for sustainable development
for improving the quality of life - looking at the
deteriorating quality of air, water, food over
time, developing an appreciation to sustain at
least what exists for the generations to come.
Global warming – meaning and effects.
3. Statistics
(i) Statistics: definition, scope and limitations of
statistics.
Statistics: definition, scope and limitations of
statistics. Special emphasis to be laid on
importance of statistics in economics.
(ii) Collection, organization and presentation of
data.
Collection of data - Sources of data: primary,
secondary. Methods of collecting data: Some
important sources of collecting secondary data;
ways of collecting primary data; organization of
data: meaning and types of variables,
frequency; presentation of data: tabular and
diagrammatic presentation (bar diagram, pie,
line, histogram, polygon and ogive curve).
(iii) Measures of Central Value: average defined;
type of averages: arithmetic mean; simple and
weighted; median and mode; ungrouped and
grouped data; numericals, relationship between
mean, median and mode.
Measures of Central Value: average defined;
type of averages: arithmetic mean; simple and
weighted; median and mode; ungrouped and
grouped data. Numericals only on mean,
median and mode for both ungrouped and
grouped data. Relationship between mean,
median and mode – the nature of the frequency
distribution – symmetrical, positively skewed
and negatively skewed.
(iv) Measures of dispersion: definition, methods of
studying variation - range; standard deviation;
quartile deviation; the mean or average
deviation; coefficient of variation.
Numericals on measures of dispersion required.
(v) Correlation: introduction, scatter diagram;
Karl Pearson’s coefficient of correlation;
Spearman’s coefficient of correlation.
Meaning and significance of correlation to be
explained along with types and degrees. Scatter
diagram, Karl Pearson’s method (two
variables, ungrouped data); Spearman’s Rank
Correlation to be explained with the help of
numericals.
(vi) Index numbers: simple and weighted - meaning,
types and purpose. Problems involved in
constructing a Price Index Number.
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What does an Index number show, measure or
indicate (like a Price Index Number). Difference
between simple and weighted – Price weighted
or quantity weighted. Laspayre’s, Paasche and
Fisher’s methods of index numbers (to be
explained with the help of numericals).
Wholesale Price Index, Consumer Price Index
and Index of Industrial Production should be
explained. Uses of Index Numbers. Problems
involved in constructing Price Index Number –
the choice of the base year, the number of
commodities to be included (coverage), choice
of prices and the method to be used.
(vii) Some Mathematical Tools used in Economics.
Equation of a straight line and slope of a straight
line.
PAPER II – PROJECT WORK – 20 Marks
Candidates will be expected to have completed two
projects from any topic covered in Theory.
Mark allocation for each Project [10 marks]:
Overall format 1 mark
Content 4 marks
Findings 2 marks
Viva-voce based on the Project 3 marks
A list of suggested Projects is given below:
1. Study consumer awareness amongst households
through designing a questionnaire and collection
of primary data.
2. Prepare a report on productivity awareness among
enterprises through use of statistical data from
statistical tables published in Newspapers / RBI
Bulletin / Budget /Census report / Economic
survey, etc.
3. Make a study of two cooperative institutions
(example milk cooperatives, etc.) with a view to
compare the organizational and financial structure
of the organizations, production capacity and
output, marketing strategies, sales, market share,
etc.
4. Study in detail the South Asian Association for
Regional Cooperation (SAARC) and its impact on
Indian economy
5. Prepare a report on the various poverty alleviation
and employment generation programmes started
in India, with special focus on MNREGA.
6. Compare the status of women of your State with
that at the National level for the last ten years, on
the basis of educational level, employment, etc.
7. Prepare a report on the forest cover in India,
highlighting the following aspects:
CLASS XII
There will be two papers in the subject.
Paper I - Theory: 3 hours ……80 marks
Paper II- Project Work ……20 marks
PAPER - I (THEORY) – 80 Marks
Part 1 (20 marks) will consist of compulsory short
answer questions testing knowledge, application and
skills relating to elementary / fundamental aspects of
the entire syllabus.
Part II (60 marks) will consist of eight questions out
of which candidates will be required to answer five
questions, each carrying 12 marks.
Note: The syllabus is intended to reflect a study of the
(ii) Elasticity of demand: meaning, types of
theory of Economics with specific reference to the
Indian Economy. Therefore, examples and specific
references to the Indian Economy must be made
wherever relevant.
1. Micro Economic Theory
(i) Demand: meaning, factors affecting demand;
Demand function; Law of Demand; derivation
of demand curve; movement and shift of the
demand curve; exceptions to the Law of
Demand.
Law of Diminishing Marginal Utility, Law of
Equimarginal Utility, consumer’s equilibrium
(iii) Supply: meaning; difference between stock
through utility approach (Cardinal) and
indifference curve analysis (Ordinal).
The concept of demand: meaning. A demand
function to be specified incorporating the
determinants of demand. Diagrams should be
used in explaining the Law of Demand, its
derivation using demand schedule. Derivation
of market demand curve from individual
demand curve.
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(a) Five States/Union Territories having higher
and lower forest cover and compare the
extent of forest coverage.
(b) Causes for decrease in forest cover in the
Country.
(c) Measures adopted by the Central/State
Governments to increase the forest cover.
(a) Cardinal Utility Analysis: meaning of
utility, total utility, marginal utility,
relationship of TU and MU, Law of
Diminishing Marginal Utility (schedule and
diagram, Only assumptions to be taught,
criticisms not required), Consumer’s
equilibrium – Law of Equimarginal Utility
(statement, schedule) and conditions of
consumer’s equilibrium using marginal
utility; (b) Ordinal Utility Analysis:
Indifference Curve – its meaning and
properties (including MRS and DMRS),
indifference map, consumer’s budget line,
Consumer’s equilibrium – condition (to be
explained with the help of a diagram only).
elasticity of demand, measurement of
elasticity of demand; factors affecting
elasticity of demand.
Various methods of measurement of the
elasticity of demand: point method -
percentage method, expenditure method and
geometric method. (Numericals required on
percentage method only). The cross and
income elasticity of demand must be
explained. Degrees of elasticity of demand to
be explained. Use diagrams wherever
necessary.
and supply; determinants of supply; Law of
Supply; movement and shift of the supply
curve; elasticity of supply
Difference between stock (intended supply)
and supply (actual supply) with the help of
relevant examples. A supply function should
be specified and explained. Law of Supply,
supply schedule and supply curve. Derivation
of market supply curve from individual supply
 curve. Movement and shift of the supply
curve, exceptions to the Law of Supply.
Elasticity of Supply: Meaning and
measurement of elasticity of supply by
percentage method and geometric method.
(iv) Market Mechanism: Equilibrium and
disequilibrium; Equilibrium price and effect
of changes in demand and supply on the
equilibrium price. Simple applications of tools
of demand and supply.
A basic understanding of the concept of
equilibrium. The effects of changes in demand
and supply - both along the curves and shift of
the curves to be explained. Basic
understanding of Price control, rationing,
Price ceiling and Floor price with the help of
demand and supply curves.
(v) Concept of production and production
function (short run and long run production
function), returns to a factor, total, average
and marginal physical products; Law of
Variable Proportions and its three stages.
A production function (concept only). Law of
Variable Proportions: statement,
assumptions, schedule (for the purpose of
understanding and not for testing), diagram
and explanation to the three stages.
(vi) Cost and revenue: Basic concepts of cost;
fixed cost, variable cost, total cost, marginal
cost and average cost – their relationships;
opportunity cost; short run and long run cost
curves. Revenue: meaning; average revenue,
marginal revenue and total revenue and their
relationships under perfect competition and
imperfect competition, Producer’s
equilibrium.
Basic concepts – private cost, economic cost,
social cost, money cost, real cost, explicit
cost, implicit cost.
Cost concepts – Fixed cost, variable cost,
total cost, marginal cost, average cost with
schedule and diagram; relationship between
average cost, marginal cost, total cost (only
concepts of long run and short run cost
curves, derivations not required). Opportunity
cost – meaning only. Difference between
accounting cost and opportunity cost.
Revenue – Average revenue, marginal
revenue, total revenue – concepts and
relationships under perfect competition and
imperfect competition. Producer’s
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equilibrium (Profit maximization goal) –
meaning; conditions: (a) TR and TC
approach along with diagram (b) MR and MC
approach along with diagram.
(vii) Main market forms: perfect competition,
monopolistic competition, oligopoly,
monopoly, monopsony; characteristics of the
various market forms; equilibrium of a firm in
perfect competition under short run and long
run.
Features of perfect competition, monopolistic
competition, oligopoly, monopoly and
monopsony (meaning only). Equilibrium of a
firm in perfect competition under short run
(explanation and diagram, shut down point
and break even point) and long run (diagram
not required).
2. Theory of Income and Employment
Basic concepts and determination of Income and
Employment
The concept of demand (exante) and effective
(expost) demand. Aggregate demand and its
components, propensity to consume and propensity
to save (average and marginal), equilibrium
output; investment multiplier (its meaning and
mechanism). Meaning of full employment.
Problems of excess demand and deficient demand;
measures to correct them.
3. Money and Banking
(i) Money: meaning, functions of money, supply
of money.
Meaning, kinds of money, functions of money
(primary, secondary and contingent) to be
explained; supply of money (only meaning
of M1, M2, M3 & M4).
(ii) Banks: functions of commercial bank; high
powered money, credit creation by
commercial banks; Central Bank: functions.
Basic understanding of the functions of
commercial banks, credit creation process.
The regulatory role of the Central Bank, its
functions and the way it controls the flow of
credit needs to be explained. A brief mention
may be made of quantitative (CRR, SLR, Bank
Rate policy and Open Market Operations)
and qualitative methods.
4. Balance of Payment and Exchange Rate
Balance of Payment – meaning, components;
foreign exchange – meaning, determination of
exchange rate (Flexible).
Balance of Payment - Meaning and components;
Causes of disequilibrium and how the
disequilibrium can be corrected; Foreign
Exchange Rate – meaning, meaning of fixed and
flexible exchange rate, determination of exchange
rate in a free market. Concepts of depreciation,
appreciation, devaluation and revaluation
(meaning only).
5. Public Finance
(i) Fiscal Policy: meaning and instruments of
fiscal policy.
Meaning and instruments of fiscal policy –
Public Revenue: Meaning, taxes (Meaning
and types), difference between direct and
indirect taxes; Public Expenditure: Meaning
and importance; Public Debt: Meaning and
redemption; Deficit Financing: meaning.
(ii) Government Budget: meaning, types and
components.
Meaning and types of Government budget –
union, state; components – revenue and
capital. Concept of deficit budget: revenue
deficit, fiscal deficit, primary deficit – their
meaning and implications.
6. National Income
(i) Circular flow of Income.
A simple model explaining the circular flow of
income with two, three and four sector models
with leakages and injections.
(ii) Concepts and definition of NY, GNP, GDP,
NNP, private income, personal income,
personal disposable income, National
Disposable Income and per capita income;
relationship between the income concepts.
A brief understanding of the mentioned
national income aggregates is needed. The
concepts of GNP and NNP should be
explained both at factor cost and market
prices, real GDP and nominal GDP, National
Disposable Income (Gross and Net), GDP
and Welfare, GDP as an indicator of
Economic welfare.
(iii) Methods of measuring National Income:
product or value-added method; income
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method and expenditure method with simple
numericals based on them.
Simple numericals based on all the methods to
be covered for better understanding of the
concept. Precautions and difficulties of
measuring National Income for each method.
PAPER II – PROJECT WORK – 20 Marks
Candidates will be expected to have completed two
projects from any topic covered in Theory.
The practical work will be assessed by the teacher
and a Visiting Examiner appointed locally and
approved by the Council.
Mark allocation for each Project [10 marks]:
Overall format 1 mark
Content 4 marks
Findings 2 marks
Viva-voce based on the Project 3 marks
A list of suggested Projects is given below:
1. Study a Public Sector Enterprise with reference to
its relevance to the Indian Economy and its future
prospects. Analyse the trend of its growth for the
last ten years.
2. Conduct a Socio Economic survey of a locality
(minimum sample size should be 30 households)
with reference to:
(a) Demographic features.
(b) Consumption Pattern – Expenditure on
necessities, comforts and luxuries.
(c) Occupational structure.
3. Compare the contribution made by different
sectors of the economy towards GDP growth
during the planning period.
4. Prepare a report on the competition in the
Aviation Sector in India with reference to:
(a) Performance of the Public Sector and Private
Sector.
(b) Operational strategies adopted by budget/low
cost carriers.
5. Make a comparative analysis of lending
performance of five Commercial Banks in the past
six years with reference to the changing CRR and
SLR.
6. Many thinkers believe that we are rapidly
depleting our natural resources. Assume that there
are only two inputs (labour and natural resources)
producing two goods (wheat and gasoline) with
no improvement in technology over time. Show
what would happen to the Production Possibility
Curve over time as natural resources are
exhausted. How would invention and
technological improvement modify your answer?
On the basis of this example, explain why it is
said “economic growth is a race between
depletion and invention.”
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7. Make a comparative study of the allocation of
financial resources of the Central Government
Budget on Agriculture, Defence, Industry and
Education in the last ten years. Prepare a report on
your observations.
8. Prepare a trend Analysis of Growth and
Productivity of any one industry such as:
Textile / Automobiles / Electronic and
Tele-communication, etc. in India for the past ten
years.
NOTE: No question paper for Practical work will be
set by the Council.